Unit 1: Vocabulary

a yearly report typically including an income statement, balance sheet, cash flow statement, and financial notes

Once a year the shareholders review the annual financial statements to see if the company made a profit or loss.

a specialist whose job is to carefully check the accounts and accounting practices of a company

The entire department was scared when the team of auditors arrived and asked to see all of the previous year's records.

a person, who may or may not be qualified, that records the financial transactions of a business

A lot of smaller companies use bookkeepers for their daily accounting needs and only use an accountant for the yearly financial statements.

a fully qualified accountant, holding current certification

When the bank asked for confirmation that John would be able to repay the loan, his chartered accountant provided it.

a set of rules (often used within a company) which show the correct way to behave

All employees must follow the company's code of conduct.

the state of being secret and/or kept secret

James was dismissed when he broke confidentiality and told his wife that the company was having financial problems.

the use of holes in financial law to have an advantage or to show figures in a deceptive way

Some accountants often use creative accounting to try and cheat the tax authority out of monies due.

the tax which is due on personal earnings

Most people complain about the rate of income tax, but for those earning over 40,000 a year who have to pay 32% it is an even less comfortable situation.

the set of rules and laws for a country which govern how accounts should be prepared

Multinational corporations need to be aware of the local accounting standards of each country they operate in.

a senior member of the accounting team, who liaises with company owners, and advises them on the financial aspects of any planned action

After the meeting with the management accountant, I realized that launching the new product line didn't make financial sense.

a member of the accounting team who deals with employee compensation and other related issues

The sales-director asked the payroll clerk to issue bonuses to the top five sales people.

(U.S. accounts payable) the member of the accounting team who deals with suppliers, issues payment for goods and services and keeps track of expenditure

When the supplier contacted the company to ask why the invoice wasn't paid, the purchase ledger clerk explained that the cheque was in the mail.

(U.S. accounts receivable) a member of the accounting team who deals with sales, raises invoices and collects payment.

The sales ledger clerk made sure to issue the invoice on the same day as the sale.

a specialist who is able to give advice on matters of taxation

Larger corporations often have a dedicated tax advisor to help them minimize the amount of tax that they need to pay.

the tax which is due on the difference between the value of a product or service and the cost of its production

The government is talking about increasing the value added tax rate next year, which means the cost of consumer goods will increase.